R35

On This Page

High-Priority Return Code

This ACH return code indicates that a debit entry was attempted on an account type that doesn't permit debit transactions. Unlike authorization or account balance issues, R35 represents a fundamental mismatch between the transaction type and account capabilities. Loan accounts and Consumer Initiated Entry (CIE) accounts specifically prohibit debit entries, with exceptions only for reversing entries that correct previous transactions.

‍

Error message: "Debit entries are not permitted for loan accounts or CIE entries (except in the case of reversing entries)."

What Causes ACH Return Code R35?

The R35 ACH return code means "Return of Improper Debit Entry" and indicates that a debit transaction was attempted on an account type that doesn't permit debit entries. This occurs most commonly with loan accounts, where only credit entries (payments toward the loan) are allowed, and Consumer Initiated Entry (CIE) accounts, which have specific restrictions on debit transactions.

R35 returns happen when there's a fundamental mismatch between the transaction type being attempted and the account's capabilities. The account holder may have authorized the payment, and the account may have sufficient funds, but the account type itself is structured to only accept certain transaction directions - typically credits rather than debits.

Can You Retry R35 Payments?

You cannot retry R35 payments using the same debit format because the account type fundamentally doesn't support debit entries. You must work with the customer to find an alternative payment method, such as obtaining banking information for a different account type that accepts debit transactions, or switching to a credit-based payment method.

Common Causes

Attempted debit transaction on a loan account that only accepts credit payments

Debit entry to a Consumer Initiated Entry (CIE) account with debit restrictions

Transaction sent to savings account with regulatory withdrawal limitations

Business account configured to reject certain types of debit transactions

Account type mismatch between transaction format and account capabilities

Key Information

Return timeframe: Next file delivery time following processing

Cannot be resolved by merchants - requires banking institution coordination

Account type restriction, not authorization or balance issue

Affects both consumer and non-consumer accounts

Exceptions exist only for reversing entries to correct previous transaction

How to Respond to an R35 Code

‍

An R35 return indicates the account type cannot accept debit transactions, requiring coordination with banking institutions and alternative payment arrangements with your customer.

When Your Customer's Payment Fails

Contact Your Bank for Clarification
Reach out to your financial institution to understand the specific account type restrictions that caused the return.
Inform Customer of Account Type Issue
Explain that their account type doesn't permit debit transactions and that this is handled at the banking level, not a merchant issue.
Request Alternative Banking Information
Ask for checking account details or another account type that can accept debit transactions.
Consider Alternative Payment Methods
Explore credit card payments, wire transfers, or other payment options that don't require ACH debits.

Email Template

Subject: Payment Processing Issue - New Payment Method Needed

Hi [Customer Name],

‍

We encountered an issue processing your payment due to restrictions on your account type. Your account (likely a loan account or specialized savings account) doesn't permit the type of electronic debit transaction we attempted.

‍

This is not related to account balance or authorization issues, but rather the specific account type's transaction capabilities. The banking institutions handle this type of restriction, and we cannot override it from our end.

‍

To complete your payment, could you please provide:

Checking account information that accepts debit transactions, or
Let us know if you'd prefer an alternative payment method

‍

We appreciate your understanding and will process your payment immediately once we receive suitable account information.

‍

[Your Company Name]

When Your Payment to Vendors Fails

An R35 return on vendor payments means you attempted to debit an account type that doesn't accept debit transactions. This requires obtaining different banking information or switching to a credit-based payment method.

Contact your bank to confirm the account type restrictions that caused the R35 return
Reach out to the vendor to request alternative banking information (checking account vs. loan account)
Consider sending ACH credits instead of debits if the vendor's account can accept incoming payments
Explore alternative payment methods like wire transfers or checks if ACH options are limited